Current Asset Review Period ended 31 December 2012

Transcription

1 Current Asset Review Period ended 31 December 2012

2 FLY LEASING LIMITED GIL is invested in shares of FLY Leasing Limited ( FLY Leasing ) which is listed on the New York Stock Exchange. As at 31 December 2012, GIL holds 876,261 shares after cumulative sale of 174,749 shares during the year. FLY Leasing has a fleet of 110 commercial aircraft on lease to 53 lessees globally as at 30 September Average age of the fleet is approximately 9.2 years with average remaining lease term of 3.1 years. 4Q12 gross dividend of US$0.22 per share declared on 15 January 2013 and payable on 20 February Demand for leased aircraft has remained firm as lease rates for Boeing NGs such as B s has held up well with no deterioration while lease rates are stabilizing for used A319s and A320s. FLY Leasing Portfolio Composition (by aircraft type) Carrying Value 1 US$ 10.80m Impairment for the Quarter: US$ 1.05m (less reversals): US$ 9.36m 1 The carrying value is determined in accordance with the requirements of IFRS and is not reflective of the current realisable value in the event of immediate disposal. Analyst coverage for FLY Leasing: Firm Rating Target Price As Of Wells Fargo Outperform US$ Jan 2013 Citi Buy US$ Dec 2012 JP Morgan Neutral US$ Oct 2012 BoA Merrill Lynch Underperform US$ 10 3 Aug 2012 Morgan Stanley Equal Weight N.A. 4 May

3 GIL AIRCRAFT LESSOR NO.2 GIL owns 100% equity of GIL Aircraft Lessor No. 2 which owns two Boeing aircraft. The two aircraft are leased to Thomson Airways Limited, which is wholly owned by TUI Travel PLC listed on London Stock Exchange. On 12 December 2011, GIL announced that it has entered into an Aircraft Sale Agreement with Federal Express Corporation for the forward sale of the two aircraft. The expected completion date of the sale of both aircraft will be on or about 30 April 2013, the scheduled maturity date of the leases. Carrying Value 1 US$ 23.50m Impairment for the Quarter: (less reversals) Aircraft lease details Purchase Price of Aircraft US$ 14.7m each Aircraft Type Boeing Manufacture Date 1993 Lease maturity Date 30 April 2013 Lease rate US$160,000 per month per aircraft 1 The carrying value is determined in accordance with the requirements of IFRS and is not reflective of the current realisable value in the event of immediate disposal. 3

4 ASCENDOS INVESTMENTS LIMITED GIL has a 40.56% equity interest in Ascendos Investments Limited ( Ascendos ). Ascendos wholly-owned subsidiary Ascendos Rail Leasing S.à.r.l. is an operating lessor with a portfolio of 238 rail equipment consisting of 3 passenger train fleets, over 30 locomotives and 100 freight wagons in mainland Europe. In the final quarter of 2012, million was received from Ascendos. The European rail transport industry was affected by the uncertainty surrounding the Eurozone and the difficult economic conditions prevalent in Europe. While passenger traffic grew, rail freight traffic appeared to have declined in Going forward, the outlook may improve if the recent improvements in financial markets were to continue and foster a pick-up in consumer sentiment and business investment. The resultant increase in the industrial production output will boost the end demand for manufactured goods which will drive freight transport demand. Railcar type breakdown by value Carrying Value m Locomotives 28% Impairment for the Quarter : - (less reversals) : 2.9m 1 The carrying value is determined in accordance with the requirements of IFRS and is not reflective of the current realisable value in the event of immediate disposal. Wagons 3% Passenger 69% 4

5 RESIDENTIAL MORTGAGE-BACKED SECURITIES ( RMBS ) GIL is invested in a portfolio of US RMBS and Australian RMBS, which are securitisation vehicles that hold US and Australian residential mortgage loans respectively. GIL s investment in the existing US RMBS portfolio comprising of 4 securities was US$10.30 million. The 4 securities were sold in November 2012 for US$8.77m. In addition, cash flows received from the 4 securities prior to the sale is US$3.86mn. Therefore, total cash flow received in excess of GIL s investment was US$2.33m. GIL invested A$5.00 million in a new issue Australian RMBS in October 2012, acquiring the Class D Notes and Class E Notes of Resimac Bastille Trust Series NC, which holds Australian non-conforming and prime residential property mortgage loans originated by Resimac Limited. The Class D Notes and Class E Notes have received full interest payments amounting to A$50, as scheduled in 4Q2012. GIL holds existing investment in Seiza Series Trust which also holds commercial property mortgages. The Class F Notes and Class G Notes have received full interest payments during the quarter, amounting to A$809, Security Current Rating (Moodys/S&P) Current face@ Acquisition Coupon Credit Support SEIZA SERIES TRUST CLASS F NR/NR 10,212,000 BBSW + 5.5% 22.71% SEIZA SERIES TRUST CLASS G NR/NR 20,910,187 BBSW + 9.5% 0.00% SEIZA SERIES TRUST SENIOR NIM NR/NR 8,900,121 BBSW + 9.5% 0.00% RESIMAC BASTILLE TRUST SERIES NC CLASS D NR/BBB 2,400,000 BBSW % 3.37% RESIMAC BASTILLE TRUST SERIES NC CLASS E NR/BB 2,550,000 BBSW + 8.0% 1.50% Carrying Value 1 A$ 29.11m Impairment for the Quarter : (less reversals) : A$ 14.22m 1 The carrying value is determined in accordance with the requirements of IFRS and is not reflective of the current realisable value in the event of immediate disposal. 5

6 COLLATERALISED LOAN OBLIGATION ( CLO ) SECURITIES GIL is invested in a portfolio of USD and EUR denominated CLO and credit-linked notes ( CLN ). The CLO investments are in mezzanine and subordinated notes which are issued by securitisation vehicles that hold collateral consisting of mainly senior secured corporate loans. The CLN investment references portfolios of trade finance obligations and corporate loans, with the obligors mainly domiciled in Asia. USD Portfolio Under the USD CLO/CLN portfolio, total investment amounted to US$27.87 million as at 31 December 2012 with total current face amount of US$28.87 million. GIL invested US$10.1 million in a new issue CLN, START VIII CLO Limited, in November In 4Q2012, total interest collected from the USD portfolio amounted to US$407, Structured credit fundamentals remain positive with corporate defaults remaining low and CLO over-collateralisation levels remaining stable across the capital structure. In addition, since July 2010, the number of rating upgrades for CLO tranches has been higher than the number of downgrades. 6

7 COLLATERALISED LOAN OBLIGATION ( CLO ) SECURITIES (cont.) EUR Portfolio Under the EUR CLO portfolio, total investment amounted to million as at 31 December 2012 with total current face amount of 19 million. In 4Q2012, total interest collected from EUR denominated CLO securities amounted to 622, There is a high risk that coupons to the securities may be suspended in the short to mid term due to ratings downgrades in the underlying portfolio EUR Denominated CLO Portfolio Security Current Rating Current (Fitch/S&P) Acquisition Coupon Credit Support Avoca CLO VI PLC Class M NR / NR 4,000, N.A. N.A. Avoca CLO VII PLC Class F CCC / CCC- 7,000, mE bp 2.56% Avoca CLO VII PLC Class G NR / NR 8,000, N.A. N.A. CLO Total 19,000, month Euribor USD CLOs EUR CLOs Carrying Value 1 US$ 28.51m 5.65m Impairment for the Quarter : Reversal of Impairment for the Quarter : (less reversals) : 0.32m 11.59m 1 The carrying value is determined in accordance with the requirements of IFRS and is not reflective of the current realisable value in the event of immediate disposal. 7

8 ASIA LISTED EQUITIES Carrying Value 1 S$ 39.96m Impairment for the Quarter : (less reversals) : Portfolio as at 31 Dec 12 No. of Securities 38 During the quarter, GIL purchased an additional S$13.07 million in listed shares. S$0.65 million was sold with the net profit amounting to approximately S$123,000. In addition, the total dividends received during the quarter from the portfolio was approximately S$212,000. About 52.7% of the portfolio was invested in companies listed in Hong Kong, 31.0% in Singapore, 8.7% in Japan, and 7.6% in South Korea. In terms of sector distribution, the highest weighting was in Finance Related (21.2%), followed by Real Estate (13.0%), Oil and Gas (11.5%), and Retail & Business Products (8.7%). As at 31 December 2012, the carrying value of the listed equity portfolio was S$39.96 million The weighted annual dividend yield 2 of the portfolio was about 3.4%. Portfolio Distribution by Stock Exchange (as at 31 Dec 12) Portfolio Distribution by Sector (as at 31 Dec 12) TOKYO 9% UTILITIES 5% TRANSPORTATION 4% OTHER 6% AEROSPACE & DEFENSE 3% AUTOMOTIVE 3% CONSTRUCTION & HOMEBUILDING 8% TELECOMMUNICATION S 7% SINGAPORE 31% HONG KONG 53% TECHNOLOGY 3% SERVICES 2% FINANCE RELATED 21% KOREA 7% RETAIL & BUSINESS PRODUCTS 9% REAL ESTATE 13% OIL & GAS 12% MEDIA & PUBLISHING 4% 1 The carrying value is determined in accordance with the requirements of IFRS and is not reflective of the current realisable value in the event of immediate disposal. 2 Based on Bloomberg s 12-month gross dividend yield as of 31 December 2012 for each security. 8

9 BOND PORTFOLIO Carrying Value 1 S$ 13.50m Impairment for the Quarter : (less reversals) : Portfolio as at 31 Dec 12 GIL is invested in various SGD and USD bonds with a carrying value of S$13.50 million. 65.0% of the portfolio was in SGD, with the balance in USD. In terms of sector distribution, the highest weighting was in Transportation (49.8%), followed by Finance Related (20.7%), Real Estate (18.4%), and Telecommunications (11.1%). As of 31 December 2012, the approximate weighted average annual coupon was 5.64%, and the weighted average maturity was 9.17 years. No. of Securities 5 Portfolio Distribution by Currency (as at 31 Dec 12) Portfolio Distribution by Sector (as at 31 Dec 12) FINANCE RELATED 20.7% USD 35% TRANSPORTATION 49.8% SGD 65% REAL ESTATE 18.4% TELECOMMUNICATION S 11.1% 1 The carrying value is determined in accordance with the requirements of IFRS and is not reflective of the current realisable value in the event of immediate disposal. 9